FAQs

Village Enterprise’s mission is to equip people living in extreme poverty with resources to create sustainable businesses. Our vision is a world free of extreme poverty and chronic hunger, where people have the economic means to sustain their families. Since its inception in 1987, Village Enterprise has been developing and refining an innovative model of poverty reduction combining training, seed capital grants, and ongoing mentoring to create small rural businesses. Village Enterprise’s economic development model plays a unique role in the microfinance industry, providing economic opportunities in rural, agricultural areas that other organizations are not reaching, and gives ultra-poor men and women the opportunity to transform a small grant ($150) into a new business, a better standard of living, and hope for the future.

What kinds of businesses do your clients start? And how long do they last?

A 2010 independent study in Kenya showed that 75% of our businesses were still in business after 3 years! Eighty-eight percent of our businesses are still operating after one year and roughly one-third of our businesses spin off other ventures.

How many businesses did Village Enterprise train and fund last year?

In fiscal 2011, we trained and funded about 2,000 businesses. As of June 2011, we’ve launched close to 23,000 businesses.

What are your values?

At Village Enterprise, we value:

Ubuntu: We serve people living in extreme poverty with respect, empathy, and dignity regardless of ethnicity, gender, religion, or education level, and value our common humanity.

Integrity: We operate with the highest levels of integrity and trustworthiness.

Passion: We believe passionately in our mission and the ability of people living in extreme poverty to improve their lives.

Commitment: We are committed to assessing and evaluating our programs to ensure that they reduce poverty and create sustainable businesses.

Openness: We respect the ideas and opinions of others; and encourage open communication and different views.

Innovation: We value innovation as a means to reduce poverty and treat new ideas, new technologies and new partners as ways to grow our impact.

Sustainability: We are committed to ensuring that our businesses and our organization are sustainable in the long-term.

How does providing a grant instead of a loan fit into the larger picture of microfinance?

We see our program as helping people “graduate” out of extreme poverty by taking a first step with a seed grant/asset transfer, training, and mentoring. Village Enterprise targets the poorest of the rural poor, who are typically not microcredit applicants for the following reasons: 1) remote rural, agricultural areas are difficult for MFI’s to reach, 2) the very poor, with typically no collateral or prior business experience, are very risk averse, and 3) farmers’ cycles of planting/harvesting often don’t meet lenders’ payback schedules. Once they have started and run their businesses, and learned how to save, they are able to explore microcredit options.

We provide seed capital in the form of a grant—either cash ($150, in two installments), or a non-cash asset, such as a foot-powered pump or other inputs to a business.

Besides grants, how else do you help participants?

Village Enterprise provides business training, savings and financial literacy training, and local business mentoring, in addition to seed capital or non-cash asset/technology transfers. We help set up “saving circles,” of up to 50 people. Each saving circle elects a leadership team, writes its own constitution, shares ideas, and provides self-directed savings and credit services to its members. Such savings and mini-loans act as a buffer against life’s emergencies, including crop failure, illness, and death in the family. In some cases we help link business owners with value chains for their business, in terms of customers, and vendors, and others links.

Does Village Enterprise fund both men and women?

Yes. We have no gender bias. At present, about two-thirds of our business owners are women. By harnessing the combined talents of both men and women, we maximize the beneficial impact on the community.

Is Village Enterprise affected by the AIDS crisis in Africa?

We actively target businesses comprised of AIDS widows and step-parents of AIDS orphans to provide a way for these families to earn an income. Our group-based business model ensures that someone is available to keep the business going when one or more members are ill.

How do you choose your participants?

We select grantees based on poverty level, willingness to work hard, and business aptitude. Business Mentors work in the villages and identify potential participants who are below our targeted poverty level of $2/day. They administer our Standard of Living of Index (SOLI) and are currently field-testing the Progress Out of Poverty Index (PPI), a poverty assessment tool developed by the Grameen Foundation. The applications are reviewed by Village Enterprise staff to ensure that we are reaching those living in extreme poverty. A typical small business owner is a subsistence farmer who struggles to provide adequate food for his or her family, has limited education and no previous experience operating a small business. Based on our history, and because women are often heads-of-household, we expect more than that two-thirds of the grantees will be women.

What kind of training do you provide to your Business Mentors?

Village Enterprise uses a “train-the-trainer” approach and provides regular training to its Business Mentors on the use of our poverty assessment tools as well as on our regular business skills and savings training. They also receive training on mentoring best practices, and refresher courses on financial literacy and other topics. With our more specialized programs Business Mentors may receive training in Peace and Reconciliation, or Conservation and Sustainable Business Practices.

How do you monitor whether the grant money is spent on the business?

Mini-business plans, with budgets, help determine the feasibility of the business idea and track progress toward its implementation. Business Mentors check in with the business owners after the first several weeks from grant disbursement to ensure inputs are purchased. Staff provide random spot-checks each quarter. As part of this ongoing process, each business group is mentored on a regular basis, thereby giving personal attention and guidance in building a successful business. Six to nine months after the business starts, a Progress Report is completed by the Business Mentor to monitor key operating goals for the new business. If those goals are completed, the business receives the remaining part of the grant ($50 of the $150 total). If not, Business Mentors provide advice and assistance in correcting the problem and recheck later; in some cases the second grant installment is not given at all.

Village Enterprise has developed a new customized and integrated online database enabling us to access all SB (Small Business), SOLI (Standard of Living Index) and PR (Progress Report) data as soon as a new business is formed and funded. Operational and evaluation information regarding training and special projects are also tracked.

In addition to these monitoring and evaluation tools, Village Enterprise has developed administrative tools to ensure accountability. These include receipts for each grant disbursement signed by two people from each group receiving money. We also track the date of grant money disbursement in our database. Spot-check audits are done quarterly to ensure all of the paperwork is in place for grants and the database is up to date.